Online Reporter
Sikhulekelani Moyo
Zimpapers Business Hub
THE Victoria Falls International Financial Services Centre is positioning itself as a competitive financial services zone to attract investment capital into Zimbabwe and Sub-Saharan Africa.
Already, the Government recently licensed its first 38 inaugural institutions, transitioning the project from policy to full-scale operations.
Countries establish International Financial Centres (IFCs) — such as London, New York, Hong Kong or Dubai — to act as specialised hubs that bridge national borders and connect global capital with local and regional economies.
IFCs provide the infrastructure to process international lending, trade finance and foreign investments that cannot easily cross mismatched national regulations.
The centre will have a strong bias towards fintech, innovation and regulation of virtual assets that remain unregulated in much of Africa. Opportunities in VFIFSC will include corporates that can list debt or equity to raise capital directly in US dollars or other convertible currencies.
Global fund managers and retail investors can trade listed equities with total freedom of capital repatriation and zero capital gains tax.
This centre will also have entities that offer cross-border corporate banking, trade finance and multi-currency accounts immune to domestic de-dollarisation pressures, among others.
VFIFSC chief legal officer Ms Meluleki Sibanda said this during a webinar hosted by the Zimbabwe Association of Pension Funds (ZAPF) yesterday.
Ms Sibanda said VFIFSC is a financial services zone designed to provide an enabling environment for capital to flow into Zimbabwe and Sub-Saharan Africa, with innovation at its core.
Its key capital attraction mechanisms include hard-currency certainty, as it operates strictly in foreign currency, which shields international funds from domestic volatility.
The centre also provides easy profit repatriation and dividend payouts.
Additionally, it offers competitive tax breaks, reduces transaction costs in capital markets and attracts offshore banks, family offices and fintechs.
The VFIFC is meant to provide deep liquidity channels for regional development, connecting global investors directly to SADC opportunities, including Zimbabwe.
Ms Sibanda said VFIFC’s vision is centred on dynamic innovation.
“So, we are very strong on fintech and innovation. We have got a digital instrument that addresses how fintech is going to be regulated and established within the International Financial Centre,” she said.
“This covers the gap that you find within the African region whereby virtual assets in your stable coins, your cryptocurrencies and all those classes, are not regulated.
“So, at the International Financial Centre, we want to set the pace within Africa and also in the international community in terms of how virtual assets are accepted, regulated, monitored and supervised within a regulated framework.”
She said the centre also wants to create a hub of knowledge and expertise, noting that Zimbabwe has lagged in financial sector development. The VFIFSC aims to attract relevant skills from the international community, especially diaspora Zimbabweans, to grow financial services expertise.
On governance, Ms Sibanda said the VFIFSC is an entity established by statute and is a territory within Zimbabwe with its own specific laws.
“At the top of the governance structure, we have a governing council, which is headed by the President and he is supported by two ministers.
“Currently, we have the Minister of Finance, Economic Development and Investment Promotion and the Minister of Justice, Legal and Parliamentary Affairs.
“This is in line with international best practice. The governing council in Dubai International Financial Centre (DIFC) and also in Astana is headed by the Head of State,” she said.
The governing council aligns the jurisdiction with Government policy and Cabinet.
Under it sits the Minister of Finance, who administers the Banking Act.
Below the governing council is the VFIFC board composed of international experts in transglobal financial services, supported by a technical advisory team made up of current financial sector regulators from the mainland.
These include the Reserve Bank of Zimbabwe (RBZ), Insurance and Pensions Commission (IPEC), Securities and Exchange Commission of Zimbabwe (SECZIM), Zimbabwe Investment Development Agency (ZIDA), Zimbabwe Revenue Authority (ZIMRA), among other key regulators.
Decision-making, however, lies with the VFIFC board.
Ms Sibanda outlined four arms of the institutional framework, namely the Administrator, Dispute Resolution, the Financial Conduct Unit and the Engine.
The administrator is the VFIFC itself, which issues licences and registers participants operating within the centre.
The Financial Conduct Unit is responsible for the regulation of financial services and monitoring compliance.
Currently housed under the administrator, at this nascent stage, it is envisaged to grow into a separate independent regulatory authority similar to the Dubai Financial Services Authority, which regulates the Dubai International Financial Centre. It will eventually carry out functions currently administered by IPEC, SECZIM and RBZ within the territory.
The dispute resolution is housed under the Victoria Falls International Arbitration Centre, an independent arm for commercial disputes arising within the territory. Criminal matters remain with mainland courts.
Ms Sibanda said the vision is to grow it into an African International Arbitration Centre, as cross-border African disputes currently go to Paris or Hong Kong.
The engine is the Victoria Falls Stock Exchange, which is the engine of the financial ecosystem within the Centre.
A key differentiator is that VFIFSC has its own distinct laws based on English law principles, which 60 percent of international investors use globally, unlike Zimbabwe’s mainland Roman-Dutch law system.
“Investors would rather take money to territories that have laws that they understand and that they use,” she said.
